NZ service sector activity keeps expanding in January, driven by new orders

Craig Ebert

New Zealand services sector activity, which accounts for about two thirds of the economy, expanded for a ninth month in January, underpinned by a six-and-a-half year high in new orders.

The BNZ-BusinessNZ performance of services index increased 0.5 points to 58.1, the highest level since November 2007, and was up from 53.3 a year earlier. A reading of 50 or higher indicates the sector is in expansion, while a reading below 50 indicates a contraction.

The PSI was led by new orders/business with a reading of 66.1, its highest level since June 2007, followed by activity/sales with a reading of 63.2. Employment rose 2.6 points to 55.2. Supplier deliveries fell into contraction with a reading of 47.7 from 52.9 in December, as did stocks/inventories with 45.6, down from 54.2.

"The surge in new orders fits with the other story of the latest PSI, that of inventory slimming at a rate of knots," BNZ economist Craig Ebert said in his note. "In short, service sector firms look to be caught short on this account."

Still, Ebert said that was a sign of "surprisingly strong upswing in demand."

The seasonally adjusted BNZ-BusinessNZ performance of composite index, which combines the PSI with the performance of manufacturing index, increased 0.2 points to 57.9 on a GDP-weighted basis, and was up 0.4 points to 57.4 on a free-weighted basis.

Today's PSI showed Otago/Southland had the fastest expansion at 60.2, followed by 57.9 in the Northern region, while Canterbury/Westland was at 50.1. The Central region experienced its first contraction since March with a reading of 48.6.

Retail trade remained the most positive sub-sector at 66.3, followed by wholesale trade at 62.1 and accommodation, cafes and restaurants at 61.4. Property and business services reported a 52.2 reading and transport and storage 50.1. Health and community services activity showed a contraction at 44.7, due to the summer holiday break.

(BusinessDesk)


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

NZ Market Snapshot

Forex

Sym Price Change
USD 0.6733 0.0050 0.75%
AUD 0.9447 0.0038 0.40%
EUR 0.5951 0.0027 0.46%
GBP 0.4653 0.0051 1.11%
HKD 5.2467 0.0390 0.75%
JPY 75.8070 0.1210 0.16%

Commods

Commodity Price Change Time
Gold Index 1194.6 5.770 2016-02-10T00:
Oil Brent 31.5 -1.150 2016-02-10T00:
Oil Nymex 27.5 -0.430 2016-02-10T00:
Silver Index 15.3 -0.170 2016-02-10T00:

Indices

Symbol Open High Last %
NZX 50 5987.0 5987.0 5987.0 -1.05%
NASDAQ 4218.8 4293.2 4283.6 -0.39%
DAX 8887.9 8899.6 9017.3 -2.93%
DJI 15897.8 15897.8 15914.7 -1.60%
FTSE 5672.3 5672.3 5672.3 -2.39%
HKSE 18486.9 18627.5 19288.2 -3.85%
NI225 16127.9 16163.0 16085.4 -2.31%